Ties were sold at the GOP convention, where the focus was on winning smaller races.

Photo: Max Whittaker/Prime, Special To The Chronicle

Ties were sold at the GOP convention, where the focus was on...

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Voting for various Californian Republican party offices continues through their convention weekend, March 2, 2013 in Sacramento, California.

Photo: Max Whittaker/Prime, Special To The Chronicle

Voting for various Californian Republican party offices continues...

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Sashi McEntee of Marin display her favorites for party office in the California Republican Party at their convention, March 2, 2013 in Sacramento, California.

Photo: Max Whittaker/Prime, Special To The Chronicle

Sashi McEntee of Marin display her favorites for party office in...

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Harmeet Dhillon campaigns for vice chairman of the California Republican Party at their convention, March 2, 2013 in Sacramento, California.

Photo: Max Whittaker/Prime, Special To The Chronicle

Harmeet Dhillon campaigns for vice chairman of the California...

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Harmeet Dhillon, right, plants a campaign sticker on a convention attendee as she campaigns for vice chairman of the California Republican Party at their convention, March 2, 2013 in Sacramento, California.

Photo: Max Whittaker/Prime, Special To The Chronicle

Harmeet Dhillon, right, plants a campaign sticker on a convention...

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Harmeet Dhillon walks with her husband Sarvjit Randhawa as she campaigns for vice chairman of the California Republican Party at their convention, March 2, 2013 in Sacramento, California.

Photo: Max Whittaker/Prime, Special To The Chronicle

Harmeet Dhillon walks with her husband Sarvjit Randhawa as she...

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Roseann Slonsky-Breault of Alameda display her favorites for party office in the California Republican Party on her walker at their convention, March 2, 2013 in Sacramento, California.

Photo: Max Whittaker/Prime, Special To The Chronicle

Roseann Slonsky-Breault of Alameda display her favorites for party...

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Republican themed swag for sale at the California Republican Party convention, March 2, 2013 in Sacramento, California.

Borrowing a theme from Democrat Jerry Brown's first term as governor, California Republicans are embracing a "small is beautiful" philosophy as they seek to rebuild their party from its nadir.

The California GOP has entered an era of diminished expectations.

As the emaciated party wrapped up its three-day statewide convention Sunday, there is little buzz about a 2014 challenge to unseat Brown. There's little hope of picking up more than a seat or two in the Legislature. There's no rush behind a ballot measure.

Instead, with the party $800,000 in debt, no statewide officeholders and claims to only 29 percent of the state's registered voters, Republicans have little choice but to start rebuilding from the bottom up.

They are focusing on developing a farm team by winning lower-level municipal races - particularly behind Latino candidates. And in a significant departure, a growing number of leaders want the GOP to be more libertarian in its views on abortion, same-sex marriage and marijuana legalization - issues that divide the party and alienate it further from the majority of California voters.

In this new worldview, the GOP doesn't have the energy or money to spend on a governor's race. A person with close ties to top donors says it would take at least $125 million to mount a credible campaign, and major donors have little desire to fund a statewide campaign until they see the party score some wins on the local level.

"It's either a suicide mission or you're taking one for the team," said Republican state Senate Minority Leader Bob Huff, R-Diamond Bar (Los Angeles County). "This cycle, the people who you'd like to see jumping up aren't."

The new GOP role model is Ignacio Velasquez. Last August, the 47-year-old solar contractor was at a make-or-break moment in his campaign for the mayor of Hollister when he got a call from an organization that said it was focused on helping elect Latinos.

"I thought, they can't be Republicans," Velasquez said and laughed. During his previous failed runs for Congress and the Assembly he got little help from his fellow GOPers. Often, "when people heard my name - Ignacio Velasquez - it was a nonstarter."

Startup helps grow party

But the call was from a startup Republican organization called Grow Elect that represents the new approach for how California Republicans are going to try to expand their party. Founded in August 2011 out of frustration with the unsuccessful Latino outreach of Meg Whitman's 2010 gubernatorial campaign, the group is focusing on winning nonpartisan municipal races.

Last year, they won more than half of the 42 races they entered, spending $150,000, a pittance in the pricey world of statewide politics. But salted out in small doses, that money can provide the difference in lower-level contests.

They cut Velasquez a check for $1,500, which enabled him to send out a mailer that he couldn't afford. Late in the race, they gave him a similar check. He won.

The approach represented a change for Velasquez who, like many Latino Republican candidates, has long been frustrated by the typical GOP Latino outreach: Hold an event in the district weeks before an election featuring mariachi musicians and "Viva (insert name of candidate)!" signs.

Nationally, Grow Elect's micro-level approach is believed to be the only one of its kind structured this way. This year, the group - now headed by Ruben Barrales, an adviser to former President George W. Bush and ex-San Mateo County supervisor - hopes to raise $1 million. New GOP state party Chairman Jim Brulte called it the model for how he wants to rebuild the party.

Many Republicans at the convention saw positive harbingers in the election of the well-respected Brulte, a former Senate minority leader, and San Francisco attorney Harmeet Dhillon as vice chair - the first woman in the role. When the president of a San Bernardino County Republican women's group made racist remarks on social media last week against Dhillon, a Sikh, party and grassroots leaders were quick to denounce them. Republicans haven't always been as quick to snuff out such comments in the past.

Sick of divisive social issues

As the GOP tries to make inroads among Latinos there was also a sense this weekend that party leaders are sick of the divisive social issues that have helped drag the party to the brink of electoral irrelevance. More Republicans are heeding markers like last week's Field Poll that found 61 percent of California voters approve of same-sex marriage, a spike from four years ago.

"It's the first time in recent memory that we've had this many candidates come through," Moran said.

Huff, who was an early supporter of Grow Elect, said "we need to be more libertarian" - meaning more hands-off - on social issues like marriage.

Same-sex marriage "is one of those issues where society is evolving. If the party doesn't understand that, and backs away from it as a core principle, we will remain at 29 percent or less," Huff said.

People 35 and under believe that politicians should "just 'Leave them alone. It's not hurting you.' And it's hard to argue with that," Huff said. House Majority Whip Kevin McCarthy, R-Bakersfield, one of the state party's most respected voices, also invoked libertarianism over the weekend.

Even the summoning of the most sacred name in GOP politics - Ronald Reagan - got a rethinking this weekend from outgoing party chair Tom Del Beccaro, a Lafayette attorney and social conservative.

"What was good for Reagan ... will not be good for us today," he said. "We have to reach (voters) in today's world in terms that they can understand and apply. We cannot live in the past. Nostalgia is nostalgia."